Commodities: Crude futures falter as US enters election end-game

Crude-oil futures are on the back foot on Tuesday afternoon with metal prices surging north as global markets take a deep breath ahead of the US elections entering their end game.

According to the RealClearPolitics average of polls, Democrat presidential hopeful Hillary Clinton has a three-point lead over Republican rival Donald Trump. IG's binary market prices an 81.5% chance Clinton will win, from 74% at the weekend.

At about 14:46 GMT, West Texas Intermediate crude was down 0.76% to $44.55 a barrel, while Intercontinental Exchange-traded Brent fell 0.78% to $45.79 a barrel.

This was markedly worse than midday levels where prices for both classes of crude were essentially flat.

"Despite the widespread clues that we could see a Clinton victory, the hesitance seen within financial markets this morning is a clue that perhaps investors are becoming a little wary of relying too much on pollsters after the referendum result," said IG's Joshua Mahony.

"Elections are often decided by the swing voters, yet in such a divisive election, perhaps it will instead be down to turnout, particularly amongst the Latin (who typically have low turnout) and black communities."

The worsening of oil prices followed the initial steady reaction after OPEC secretary general Mohammed Barkindo said cartel members would come to an agreement in Vienna later this month to curb output.

At Accendo Markets, analysts Mike van Dulken and Henry Croft said that after crude's rally on Monday, traders were again looking to OPEC's ongoing "calamitous negotiations for a production cut in November as well as tonight's election result".

SwissQuote retained its bearish view towards key support for WTI at $42.55.

"In the long-term, crude oil is now recovering from its sharp decline and the signs of recovery are now strong," it said. SwissQuote saw WTI at $60 a barrel before year's end.

Meantime, Comex-quoted gold was up 0.2% to $1281.9 an ounce, while silver firmed 0.9% to $18.32 an ounce. Copper rose 0.89% to 233 cents a pound.

"Gold is again flirting with the 200-day moving average and traders cannot decide which way it will move," said Naeem Aslam of ThinkMarkets.

"The market is pricing in that there are over 80 percent chance that a rate hike will take place if Clinton wins the election and in our opinion that is already baked in the price. Hence the downside is limited," Aslam said.

At roughly 1446 GMT, sterling was down 0.17% to $1.2375, and the dollar-spot index was broadly flat at $97.779.

On the London Metals Exchange, three-month prices for zinc and aluminium were up mildly to moderately, while copper and tin surged more than 2% each.

Chicago Board of Trade-listed corn added 0.36% to 347.5 cents a bushel, with wheat rising 0.37% to 411.5 cents a bushel.

ICE-priced cocoa was up 1.02% to $2470 a MT. Cotton No.2 was up 0.47% to 68.77 cents a pound,and live cattle improved 0.12% to 101.78 cents a pound.